IAG unit Swann incentivised “inappropriate” sales
Insurance Australia Group (IAG) subsidiary Swann Insurance incentivised sales of add-on insurance products that were “inappropriate” for certain customers given their circumstances, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was told on Tuesday.
Benjamin Bessell, IAG’s executive general manager, business distribution and group executive, admitted to Counsel Assisting the Commission, Mark Costello that Swann sold add-on insurance products as part of multi-policy sales incentives offered to motorbike dealerships that may not have been appropriate and were designed only to drive sales with little regard for customers’ circumstances.
“Do you agree that Swann’s remunerations and incentive arrangements … incentivised sales alone?” Costello asked.
“… I would say the predominant motivation or incentive was sales,” Bessell replied.
Costello asked: “It was the exclusive motivation, wasn’t it … the entire point of them was to incentivise sales?”
“Yes, that’s true,” Bessell responded.
Costello continued: “Do you think that these incentive programs incentivised sales that were inappropriate?”
“On occasions that did occur – yes,” Bessell admitted.
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
